The Government Accountability Office (GAO) noted that the financial performance of credit unions that participated in the Community Development Capital Initiative (CDCI) of the Troubled Asset Relief Program had improved.
According to the report, 36 banks and 48 credit unions originally participated in the program. As of March 31, 2016, 57 of the original 84 CDCI participants remained in the program, including 26 banks and 31 credit unions.
The GAO found that the financial condition of credit unions remaining in the CDCI program as of March 31, 2016, appears to have improved since the end of 2011. GAO examined five indicators -- the net charge-offs to average loans ratio, the delinquent loans ratio, the delinquent loans to net worth ratio, the return on average assets, and the net worth ratio.
The median of all five indicators of financial condition that GAO analyzed improved from 2011 to 2015. However, since December 2014, the median of one indicator — the return on average assets — weakened.
The report noted that for those credit unions that had not repaid CDCI investment, beginning no later than September 2018, the rates paid on the CDCI investment will increase from 2 to 9 percent. But Treasury officials expect most will repay their investment before September 2018.
Read the report.
Give the taxpayers a break and end this misguided subsidy at the planned time. If these banks and credit unions haven't gotten out of the deep hole that the bad policies of the politicians and bureaucrats in Washington, DC put them in by now, they are not likely to do so anytime soon. Euthanasia would appear to be the merciful solution. --Marvin U. 07/06/16
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